Finance director asks board to adopt debt issuance and post‑issuance compliance policies ahead of landfill and airport financing

Pitkin County Finance Director Liz Woods presented two formal policies for board consideration at a Jan. 21 work session: a county debt issuance policy and a debt post‑issuance compliance policy. She said adopting clear written policies now would help the county with credit rating reviews, set parameters for when and how the county issues debt, and document procedures required after bonds are sold.

What staff presented

Woods explained the purpose and mechanics of typical municipal financing tools — general obligation (GO) bonds, revenue bonds, and certificates of participation (COPs) — and the governance and legal framework the county must follow. She reminded the board that most indebtedness is subject to the county’s Home Rule Charter and Colorado’s TABOR rules (the Teller Amendment/Taxpayer’s Bill of Rights), and that GO bonds usually require voter approval and are limited by statutory and charter constraints.

Woods said counties generally issue debt for large infrastructure and capital needs that benefit future users (matching the multi‑decade life of the financed asset to the debt term). She framed three policy tests embedded in the draft policy: equity (those who benefit should pay), effectiveness (the financing accomplishes the project purpose) and efficiency (no better or cheaper alternative exists such as grants or pay‑as‑you‑go).

Key items staff highlighted

- Types of debt: Woods summarized GO bonds (voter‑approved; limited to 3% of assessed valuation under Colorado rules), revenue bonds (pledged to a specific revenue stream) and COPs or municipal leases (subject to annual appropriation and not treated the same as GO debt under state law). She said COPs are commonly used for buildings and are approved by the board without voter referenda.

- Existing and authorized capacity: Woods provided a snapshot of the county’s outstanding bonded debt as of Dec. 31, 2024, and noted voter‑authorized but unissued amounts: a $12 million authorization tied to Healthy Rivers and Streams (with a maximum repayment cost of $21 million) and authorized solid‑waste revenue bond capacity of $22 million principal (up to $37 million including interest) that was approved by voters in a prior measure.

- Credit rating and issuance steps: Woods described the credit‑rating process (S&P, Moody’s, Fitch) and how written financial policies and stable fiscal practices can reduce borrowing costs. She said higher ratings generally lower interest expense and that Moody’s recently reviewed and raised the county’s rating on outstanding property‑tax and sales‑tax backed bonds. Woods outlined the typical issuance process: municipal adviser planning, legal review, voter approval (when required), underwriting or private placement and post‑issuance compliance.

Planned actions and timing

Woods told commissioners they should expect resolutions related to the planned landfill financing later in 2025; she estimated staff would bring required authorizing resolutions in mid‑year (July–August) as plans finalize with the county’s municipal advisors. She also said staff would circulate the draft policies to the county attorneys, bond counsel and the county’s Financial Advisory Board for review and bring the documents back for first reading in February.

Commissioner questions

Commissioners asked about collateral, what assets can be pledged for debt, refunding and prepayment practice, and whether the airport financing would be rated. Woods said depreciable assets such as vehicles are generally poor collateral; building or land are typically used as collateral for COPs when appropriate. She noted airport or landfill revenue issues are often marketed or privately placed and may be unrated, depending on the breadth and stability of the pledged revenue stream. Woods said staff will coordinate closely with municipal advisors, bond counsel and the county attorney’s office before returning the policies for formal board action.

Ending

Commissioners supported posting the policy for review and asked staff to obtain Financial Advisory Board and bond‑counsel input before first reading. Woods said she will update references discovered in staff review and circulate the package for legal and advisory review ahead of the formal hearing.